New Delhi: In a bid to boost digital transactions and create a cashless India, the Narendra Modi government is likely to ban all cheque books.


COMMERCIAL BREAK
SCROLL TO CONTINUE READING

A senior functionary of industry body CAIT had last week said that the Centre may withdraw the bank cheque book facility in the "near future" to encourage digital transactions.


Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal said the government needs to encourage the use of debit and credit cards.


"In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions," he said.


The CAIT secretary general said, "The government spends Rs 25,000 crore on the printing of currency notes and another Rs 6,000 crore on their security and logistics.


"Moreover, banks charge 1 percent on payments through debit card and 2 percent through credit cards. The government needs to incentivise this process by providing subsidy directly to the banks so these charges can be waived."


Khandelwal said only 5 percent of the total 80-crore ATM-cum-debit cards are used for cashless transactions, while 95 percent of them are used for cash withdrawals.


However, the plan to ban cheque books could have a major impact on the trading communities which heavily rely on cheque for transaction. Some media reports, quoting data have also said that over 95 percent transactions in the country occur through cash and cheques.


The government has been pushing for a less-cash economy and promoting digital transactions, especially post- demonetisation of high value currency in November last year.


According to the Payments Council of India, the growth rate of the digital payments industry, which was earlier in the range of 20-50 percent, has accelerated post demonetisation to 40-70 percent.


Most digital players in the industry have made multi-fold investments in the sector in the last one year in infra, brand, marketing, creating awareness.


With PTI Inputs